BMW 4S Store Prepaid Card Trap: Still Selling Packages After Contract Termination

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Source: Beijing Business Today

The BMW 4S dealership, whose parent company was forced to suspend trading back in April, still conducted self-operated prepaid services in July. It wasn’t until a month after the store closed that BMW sent termination reminder texts to car owners. The maintenance services recently paid for by owners not only became unusable, but more importantly, the store that was kicked out of the brand authorized system—even if it continued to provide services—was no longer recognized by BMW, which could also affect the official warranty.

Lawyers believe that BMW’s termination of dealer authorization this time infringes on consumers’ rights to fair trade, the right to information, and property safety. As the brand owner, BMW has a regulatory responsibility. If BMW failed to promptly warn of risks or effectively intercept prepayment collection when terminating dealer authorization or discovering abnormal operations, it constitutes clear managerial negligence. Additionally, BMW’s cancellation of authorization indirectly damages consumer rights and should fulfill after-sales protection obligations.

Automotive after-sales service is a low-frequency, high-value, trust-dependent, safety-critical service category. Its prepaid services, authorized maintenance, and factory warranties have long suffered from information asymmetry, unclear responsibilities, and high costs of rights protection and evidence collection. New car makers are pushing for innovation in sales and service models, and traditional 4S stores are undergoing comprehensive transformation. Protecting existing car owners’ legitimate rights and preventing consumers from becoming victims of industry transition are core responsibilities that automotive brands cannot shirk.

After store closures

BMW only sent out termination reminders

BMW owners like Su Yang, represented by the case of the BMW X4 owner, mainly question two points: first, why did BMW only issue a termination reminder after the dealer closed; second, whether BMW had notified the dealer of the termination earlier, but both sides failed to inform the owners in time, leading to rights infringement.

In July 2025, Su Yang, who owns a BMW X4, purchased self-operated maintenance services at the Shanghai Xuhui Baoxin 4S store after a sales representative verbally promised nationwide service rights, spending over 10,000 yuan.

On August 29, Su Yang received an official SMS from BMW stating that due to recent business adjustments by Guanghui Baoxin Group (the parent company of Shanghai Xuhui Baoxin), their after-sales and insurance products are not directly sold by BMW and cannot be redeemed or serviced by non-authorized Guanghui dealerships.

At the time of receiving the message, Su Yang had only used the service once, with most remaining unused. When he went to the store in September, he found it had already closed.

Regarding the suspicion that the store closed before the termination reminder, BMW China customer service told Beijing Business Today that they found no record of such a message being sent in August 2025. They stated that Xuhui Baoxin officially terminated BMW China’s authorization on October 15, with records showing a cancellation notice was sent on October 9. However, Su Yang and other owners said they never received this notice, nor did they change the phone number registered in BMW’s system. BMW China customer service suggested it might be due to mobile phone blocking.

Notably, the photos provided by owners show that Xuhui Baoxin had already closed on September 12. Su Yang pointed out that after-sales services are low-frequency, making it difficult for owners to detect dealer operational issues in time. BMW’s decision to terminate was likely based on prior research and known risks, yet it did not leave a buffer period, continued selling self-operated services, and only issued a reminder after closing—these are reasons for the infringement of owners’ rights.

Owners’ suspicions are well-founded. BMW had long intended to revoke the authorization of multiple 4S stores. Documents from Guanghui Baoxin Group show that BMW decided to revoke the sales authorization of 10 dealerships under Guanghui Baoxin starting March 31, 2025. Another document from August 12, 2025, revealed that BMW would gradually revoke the sales authorization of most Guanghui dealerships around mid-August. Although Xuhui Baoxin was not on the initial list, the risk of termination was already very clear.

Furthermore, Guanghui Baoxin’s operational risks surfaced earlier. It was briefly suspended in January 2025, and on April 1, 2025, it was forcibly suspended for failing to disclose 2024 performance on time, and has not resumed trading since.

While the termination of a 4S store allows repairs, it impacts warranty coverage

Regarding how to handle the unused self-operated service packages purchased by owners like Su Yang, BMW China stated that these services are not provided by BMW officially, and owners need to contact Guanghui Group directly. However, Guanghui Group’s official phone line is currently unreachable, and other BMW 4S stores refuse to take over these service packages citing different sales entities.

Besides Xuhui Baoxin, Yuntong Jiabao 4S store was also revoked by BMW. The store remains open and can still provide maintenance services, but owner Ms. Zhu, who recharged 3,000 yuan for her BMW 5 Series and has remaining unused balance, faces difficulties in refund and official recognition of maintenance.

After learning that the store lost authorization, Ms. Zhu repeatedly requested a refund for the unused balance, but was refused with various excuses. She contacted BMW official, who said that the authorization of Yuntong Jiabao ended on October 31, 2025, and that the after-sales products purchased there are only valid for Yuntong Group. They also suggested she continue to enjoy services at that store. Ms. Zhu pointed out that her recharge was based on BMW’s official authorization, not just the dealer group, and that the change in authorization status now makes the purchase inconsistent with the original conditions. She worries that maintenance at a non-authorized store could affect vehicle warranty, and BMW might refuse to fulfill warranty and extended warranty obligations.

Currently, all Yuntong Group BMW 4S stores in her city have been revoked. An employee from Yuntong Group revealed that the store stopped new car sales due to losses, but maintenance services remain profitable, with parts ordered from official BMW channels and discounted labor fees. The employee also confirmed owners’ concerns: after losing authorization, maintenance records cannot be entered into BMW’s system, which could affect warranty if the vehicle is still within the three-year warranty period or if extended warranty was purchased.

BMW China customer service also stated that after Yuntong Jiabao’s authorization was revoked, it no longer has the qualification to maintain BMW and MINI vehicles. Maintenance records at this store are not recorded in the official system, which may impact warranty, depending on the situation.

The BMW owner’s rights and interests in the future remain uncertain. The Beijing Business Today reporter sent interview questions to BMW China but has not received a reply as of publication.

The Erosion of the Right to Know and Fair Trade

Fundamentally, BMW owners face the issue of their prepaid funds not being honored, leading to rights infringement. Sun Yuhao, senior partner at Shanghai Hahai Yongtai Law Firm, stated that operators collecting prepayments but failing to provide services as agreed violate consumers’ rights to fair trade and property safety, and should either fulfill their commitments or refund the prepayment. Dealers who continue collecting prepayments despite knowing or should know of significant operational risks may also be engaging in malicious “money grabbing,” infringing consumers’ right to information.

The Consumer Rights Protection Law of the People’s Republic of China explicitly guarantees consumers’ right to information, fair trade, and property safety. Unlike typical prepaid disputes, consumers purchasing services from dealers often associate the brand with BMW. Su Yang said that in consumers’ eyes, dealers to some extent represent the brand.

Sun Yuhao pointed out that BMW, as the brand owner, cannot entirely shirk responsibility. If BMW terminates authorization or finds dealer irregularities, but fails to disclose risks or effectively intercept prepayment collection, it is managerial negligence and infringes on consumers’ rights to information and fair trade. Moreover, BMW only notified the termination via SMS, with omissions, and did not fulfill a prudent notification obligation. It should bear supplementary compensation responsibilities for damages caused by its fault and fulfill after-sales guarantees.

This view is supported by clear departmental regulations. The “Automobile Sales Management Measures” issued by the Ministry of Commerce in 2017 explicitly state that suppliers and dealers responsible for the “three guarantees” must continue providing after-sales services to consumers.

Sun Yuhao further explained that once a 4S store loses authorization, it shifts from a brand-authorized service provider to an independent repair shop. When the service provider’s status fundamentally changes and the original contract purpose cannot be fulfilled, consumers have the right to refuse service and terminate the contract. BMW’s authorization cancellation indirectly causes serious damage to consumer rights and obligations, and it should cooperate with consumers to terminate the original service contract or coordinate with other authorized stores to continue service under the original terms.

Beijing Business Today reporter: Lin Yuwei